The fourth quarter earnings season unofficially came to an end today now that Wal-Mart (WMT) has reported its quarterly numbers. This earnings season, more than 1,700 companies reported their quarterly numbers, and our job here is to identify the reports that look the best.
One way that we narrow our list down is to look for earnings “triple plays.” Long-term Bespoke subscribers know how much we like triple plays (we have a weekly report specifically highlighting them), but for those that haven’t heard of the term, we came up with it back in the mid-2000s for companies that beat their earnings estimates, beat their revenue estimates and also raise guidance. We consider triple play stocks to be the cream of the crop of earnings season, and we are constantly finding new long-term buy opportunities from this basket of names each quarter.
As we’ve highlighted over the last few weeks, this earnings season saw an outsized number of companies lowering guidance and a minimal number of companies raising guidance. We only saw 44 earnings triple plays this season, which is a very low number. To put this season’s triple play reading into perspective, last season we saw 136 triple plays—which is more than 3x this season’s number.
To further filter the list of 44 triple-play stocks, we analyzed the chart patterns for each of them to identify the ones that currently look the best from a momentum/technical perspective. Of the 44 triple plays, we found 10 stocks that look the most intriguing to us at their current price levels. A lot of the triple plays this season have gone parabolic recently, so these are names that we wouldn’t recommend buying until they pull back some. The names we have identified are generally trending nicely higher, but they aren’t at the extreme overbought levels that other triple plays on the list are at. If you are looking to gain exposure to certain areas of the market and need some individual stock ideas, we recommend taking a good look at the 10 triple-play names we found.
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